Hello! We're 24 year old engineers who are getting married next year, currently living together in Denver. Our student loans are paid off in full and we have no other debt. We're renting an apartment until the overvalued local housing market falls.
Our long-term FIRE goals are to buy a few acres in the foothills of the Rockies, build our home, and have at least one of us RE when we're ready to have kids. Right now, we'd like to start trying for kids around 30, which likely means one of us would RE while the other continues working for a few years.
| | Katy | | Kirk | | Together |
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Monthly Income | | | | | | $9,684 | | |
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Gross Salary | | $5,609 | | $5,371 | | $10,980 | | |
Pre-Tax Medical/Vision/Dental | | $63 | | $77 | | $140 | | |
HSA | | $327 | | $ - | | $327 | | |
401(k) | | $561 | | $269 | | $829 | | Katy = 10%. Kirk = 5%. |
Employer Match | | $337 | | $295 | | $632 | | Katy = base 3%, match add'l 3%. Kirk = base 3%, match add'l 2.5%. |
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Monthly Taxes | | | | | | $2,483 | | |
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Federal | | $616 | | $692 | | $1,308 | | |
State | | $177 | | $194 | | $371 | | |
Social Security | | $322 | | $329 | | $651 | | |
Medicare | | $75 | | $77 | | $152 | | |
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Monthly Expenses | | | | | | $2,275 | | |
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Rent | | $ - | | $ - | | $1,490 | | |
Renter's Insurance | | $10 | | $12 | | $22 | | |
Electricity | | $ - | | $ - | | $60 | | Est. average between current summer & unknown winter bill. |
Phone | | $ - | | $23 | | $23 | | Katy's paid by employer. Kirk's basic paid by employer, add'l cost for texting/data. |
Internet | | $ - | | $ - | | $ - | | Hotspot from work phone with unlimited data plan. |
Netflix | | $ - | | $8 | | $8 | | |
Car Fuel/Maintenance | | $ - | | $25 | | $25 | | Extremely limited personal use of 2000 F250. Business use fully reimbursed by employer for constant travel to remote jobsites. |
Auto Insurance | | $11 | | $100 | | $111 | | Katy has basic to legally drive & cover her as a cyclist. |
Public Transport | | $ - | | $9 | | $9 | | Katy has an unlimited RTD pass from employer. |
Groceries | | $150 | | $ - | | $150 | | |
Beer/Wine | | $25 | | $35 | | $60 | | |
Eating Out | | $50 | | $50 | | $100 | | |
Clothing/Shoes | | $15 | | $15 | | $30 | | |
Bicycle Maintenance | | $8 | | $8 | | $16 | | |
Household Maintenance | | $15 | | $15 | | $30 | | |
Gym/Fitness | | $ - | | $ - | | $ - | | Replaced by bike commuting & apartment fitness center. |
Medication | | $15 | | $ - | | $15 | | |
Travel | | $ - | | $ - | | $75 | | Three trips/year, both families & friends across country. |
Miscellaneous | | $25 | | $25 | | $50 | | |
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Assets | | | | | | $121,420 | | |
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Cash/Savings | | $7,800 | | $15,900 | | $23,700 | | |
Vanguard | | $36,450 | | $19,620 | | $56,070 | | Roughly 70% VTSAX, 25% VTIAX, 5% VBTLX at the moment. |
HSA | | $3,310 | | $ - | | $3,310 | | |
401(k) | | $18,060 | | $14,580 | | $32,640 | | |
Roth IRA | | $5,700 | | $ - | | $5,700 | | |
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| | | | Monthly | | Annual | | |
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Income | | | | $7,201 | | $86,411 | | |
Expenses | | | | $2,275 | | $27,298 | | |
Balance | | | | $4,926 | | $59,113 | | 68.4% savings rate. |
Notes1. We'll each receive not insignificant amounts of money when we turn 25 from family living trusts. This will go into Vanguard and eventually towards land/home down payment. To simplify, we're considering this amount to be the down payment and expect our future mortgage to be lower than our current rent, since we both have excellent credit.
2. Rent is a major percentage of our expenses partially thanks to an overvalued housing market, but we also accepted that it was worth it to us for an apartment we love directly on the major bike trail & public transport lines. Without rent, our annual expenses drop under $10k.
3. We're looking forward to simplifying some of this after we get married next year but don't expect it to change significantly since we already live together.
4. We both have hobbies that we're excited to pursue in ER that may bring in some money, but we're working towards a SWR of 4% and not counting on additional income.
5. Our savings rates for the first two years post-college was very low, primarily due to paying off large student loans ASAP, Kirk purchasing a vehicle (in cash), and Katy working/traveling in Europe for half a year.
6. Kirk is newer to the Mustachian lifestyle and FIRE planning than Katy, and still is in the process of converting cash to investments, opening/maxing out a Roth for this year, maximizing employer 401(k) matching, etc.
Questions1. Retirement funds - we're contributing at least up to the employer matches, but not maxing out our 401(k)s. We also each have a Roth IRA that we're maxing out each year. What is the general Mustachian consensus on 401(k) and Roth IRA contributions when you're hoping to FIRE at 30 or 35? I know MMM & others have written about loopholes for early withdrawals, but it still seems to make more sense to keep those funds accessible. I'd love to understand the pros and cons in our situation!
2. Any advice on fund allocation? Percentage of VTSAX will increase, but we wanted to hit admiral shares first. We are very new to investing and after our own research are basically just following the advice here.
3. We know that building our own home (even a reasonable one) will be more expensive than buying, but it's a dream for both of us. We'll be able to do much of the finishing work ourselves but will hire contractors for foundation, framing, etc. Is there any Mustachian advice on this? Anything we should be thinking about now, a few years early?
4. We're open to other suggestions for areas to reduce & improve! I know we're capable of reducing grocery/eating out budgets to rice & beans, but quite honestly we love food, cooking, and delicious local beers…
So what do you think, Mustachians? With our current spending, a 4% SWR means we could FIRE at $682,000. Is it reasonable to think that we might be able to do it by 30 or a couple years after? Thoughts, criticisms, advice all very much appreciated! Thanks for reading!